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Provost’s Long View: shaping the future of UCL in a challenging environment

27 March 2014

As
you will probably know by now, we are in the process of consulting with all
staff on the direction that UCL is going to take over the next 20 years. The
resulting strategy, UCL 2034, will enable us to build on
our outstanding position as a research and innovation powerhouse and
concentrate further our efforts on improving our student experience and
enhancing our education agenda.

Through
such mechanisms, we intend to secure our position further as a world-leading
institution for decades, or centuries, to come.

In
my time at UCL, I have already come across numerous examples of fantastic
research, outstanding staff, wonderful student activity and innovative
teaching. However, we must not rest on our laurels.

As
we enter a period of ever-increasing competition in higher education, both
domestically and overseas, we must strive to ensure that our students’
university experience is of the very highest quality.

UCL’s
graduates must remain among the most highly skilled and employable in the
market, receiving a rounded, global education that enables them to boost our
economy and help tackle the grand challenges facing global society.

There
are many ways in which our strategic approach can help build on our current
success.

Whether
it is by investing in UCL’s estate and facilities, thinking about the ways in
which we can effectively integrate our research with our student education,
repositioning ourselves through our collaborations in London and overseas, or
by embedding our global citizenship agenda and culture of enterprise and
entrepreneurship within every programme of study, this is a period of
opportunity when we can all help shape the future of this great university.

If
you are yet to visit the UCL 2034 website, I urge you to take a look and submit your
contributions before the final version of the strategy is presented to UCL
Council next term.

Balancing the books

As
we consider UCL’s future, it is important that we also reflect on the wider
issues across the higher education landscape.

David
Willetts MP, Minister of State for Universities and Science, has now confirmed
that there will be no inflationary increase in home/EU tuition fees for
2015/16. This is the second consecutive year that fees have been maintained at
£9,000 per annum, which means that, due to inflation, we are, in effect,
experiencing a real-terms cut in our funding.

Moreover,
our costs are not stationary. We’ve awarded a one per cent pay increase year on
year for the past three years and with incremental drift this amounts to an
annual increase in our salary costs of approximately three per cent per annum
across the institution. That may not sound like much, but it adds up to £17 million per annum.

Non-staff costs are also subject to
inflationary increases and research costs generally increase at a higher rate
than headline inflation.

In
the absence of an inflation-linked rise in student income, our finances are
thus constantly being squeezed. We are currently coping with these pressures by
increasing efficiency and care over our expenditure, but the reality is that
this lack of an inflationary uplift in our home/EU student income is already
beginning to bite quite hard.

Abolishing the student
number cap

The
government has also confirmed its plans to abolish the cap on student numbers,
creating an additional 30,000 undergraduate places nationwide. The potential
ramifications of this move are far- reaching.

An
overall increase in student numbers necessitates a related increase in
long-term public funding. However, with the introduction of higher tuition
fees, HEFCE actually began to reduce its teaching grant associated with each
student place.

Indeed,
this week, I received confirmation of UCL’s share of the HEFCE grant for 2014/15
and our teaching funding has fallen to less than £42 million from the £48
million we received in 2013/14.

This
loss is partially offset by an increase in our share of the research funding
pot (from approximately £115.9 million to just over £117 million), but
nevertheless, UCL’s overall HEFCE funding has been reduced by more than £5
million compared to last year.

The
funding of these new national 30,000 undergraduate places is relatively opaque.
Although it appears that student loan and support costs have been funded by the
Treasury, it is clear that HEFCE has received no increase in funding for these
students.

So,
in effect, the unit of resource for each individual student will have been
diluted (assuming that some of the 30,000 students will be studying subjects
that still attract HEFCE support in band A or B). This compounds the effect of
there being no inflationary element to the £9,000 fee and creates additional
financial pressure.

Not
surprisingly, my view is that any additional funding for higher education would
have been better used to fund more properly existing student numbers through
HEFCE, particularly in band B.

Student
loan black hole

Before
I move on to better news, I should point out the growing concerns over the resource
accounting and budgeting (RAB) charge – the level of student debt that the
government must write-off each year.

Graduates
currently pay nine per cent of earnings above £21,000 in student loan
repayments. If they don’t earn enough to repay in full, the loan is written off
after 30 years.

The
Department of Business, Innovation and Skills estimates that the RAB charge has
risen to 45% of the £10 billion in student loan payments each year. One reason
for this is that the average graduate’s starting income fell in the order of
10% during the recession.

The
additional 30,000 students nationwide will further increase the pressure on
this system and, against this backdrop, I have asked Mr Willetts to guarantee
that funds will not be diverted from the science and research budget in order
to make up any shortfall.

After
asking the question, I experienced the Minister’s ire (not for the first time!),
but I feel it is important that we receive these assurances. With Russell Group
universities contributing an estimated £30 billion a year to the UK economy, it
is essential for the future of our country that research funding is protected
long term.

The Budget

Despite
the challenging financial climate, there was also some good news in last week’s
Budget, with the Chancellor of the Exchequer earmarking some significant new
funding for science.

The most
prominent commitment was a pledge of £42 million over the next five years for
the Alan Turing Big Data Institute.

Universities
wishing to host the institute have been invited to compete for the funding and
in his speech, George Osborne referred to the fact that he would like to see:
“Britain lead the way again in the use of big data and algorithm research”. I expect us to submit a high-quality bid in due course.

Big data has been prioritised by the government and labelled
as one of the “eight great technologies of the future… (with) the potential to
transform public and private sector organisations; drive research and
development; increase productivity and innovation; and enable market-changing
products and services”.

This is an
important area of research for UCL and we are already building an enviable
track record across a range of ‘big data’ initiatives, from medical bioinformatics to energy-use
mapping and climate modeling. Next month's UCL Big Data Symposium provides an opportunity to showcase the important role of big data analytics in a broad range of sectors.

In addition to the Alan Turing Big Data Institute,
the Chancellor also announced extra funding (£5 million in 2014–15 and £20
million in 2015–16) for new ‘Catapults’ – technology and innovation centres
where UK business, universities, science and engineering combine to transform
ideas into new products and services to boost economic growth.

Doctoral training

Finally
there was the particularly welcome news of £106 million over five years to fund
approximately 20 additional Centres for Doctoral Training (CDTs), providing a
further boost to technology and innovation in the UK.

After the
announcement, Professor David Bogle, Head of the UCL Graduate School, wrote an interesting summary of UCL’s role in the development of a number of CDTs.

In it, he
points out that we have had considerable success when bidding for CDT funding
and says that they enable us to “train creative, critical,
autonomous, intellectual risk-takers who push back the boundaries of frontier
research and take their research skills into society”.

This is precisely the kind of impact
that we want to see a UCL education deliver and additional funding for more
CDTs can only be good news.

Easter approaches

We
are clearly living through challenging times as the competition for funding
increases. The best response that we can provide is to ensure that we deliver
excellence in everything we do. I should say that even against this challenging
backdrop, the UCL community is doing a remarkable job.

I
would like to thank you all for your hard work over the past
term and particularly for engaging so positively with the development of the UCL 2034 strategy. If you are
taking leave at the end of term, I wish you a relaxing Easter break.